Problem

Gruver Corporation reported the following payroll-related costs for the month of February:...

Gruver Corporation reported the following payroll-related costs for the month of February:

Gross pay (wages expense)

 $250,000

Social Security and Medicare taxes

 19,125

Federal and state unemployment taxes

 15,500

Workers’ compensation insurance

 8,500

Group health and life insurance benefits

 10,000

Employee pension plan benefits

 22,875

Total payroll costs for February

 $326,000

Graver’s insurance premiums for workers’ compensation and group health and life insurance were paid for in a prior period and recorded initially as prepaid insurance expense. Withholdings from employee wages in February were as follows:

State income tax withholdinas

$ 5,875

Federal income tax withholding

56,000

Social Security and Medicare tax withholdings

19,125

a. Record Graver’s gross wages, employee withholdings, and employee take-home pay for February.


b. Rccord Gruver’s payroll tax expense for February.


c. Record Gruver’s employee benefit expenses for February.


d. Do the amounts withheld from Graver’s employees represent taxes levied on Gruver Corporation? Explain.

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